Correlation Between Vanguard Industrials and Mast Global

Can any of the company-specific risk be diversified away by investing in both Vanguard Industrials and Mast Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Industrials and Mast Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanguard Industrials Index and Mast Global Battery, you can compare the effects of market volatilities on Vanguard Industrials and Mast Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Industrials with a short position of Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Industrials and Mast Global.

Diversification Opportunities for Vanguard Industrials and Mast Global

-0.11

Correlation Coefficient

Vanguard Industrials  Mast Global

Good diversification

The 3 months correlation between Vanguard and Mast is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Industrials Index and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery and Vanguard Industrials is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Industrials Index are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of Vanguard Industrials i.e., Vanguard Industrials and Mast Global go up and down completely randomly.

Pair Corralation between Vanguard Industrials and Mast Global

Considering the 90-day investment horizon Vanguard Industrials Index is expected to under-perform the Mast Global. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Industrials Index is 1.02 times less risky than Mast Global. The etf trades about -0.01 of its potential returns per unit of risk. The Mast Global Battery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,440  in Mast Global Battery on December 27, 2024 and sell it today you would earn a total of  25.00  from holding Mast Global Battery or generate 1.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vanguard Industrials Index  vs.  Mast Global Battery

Vanguard Industrials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard Industrials Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Vanguard Industrials is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Mast Global Battery

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Mast Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Vanguard Industrials and Mast Global

The main advantage of trading using opposite Vanguard Industrials and Mast Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Industrials position performs unexpectedly, Mast Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mast Global will offset losses from the drop in Mast Global's long position.

The idea behind Vanguard Industrials Index and Mast Global Battery pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.